Asian currencies firmer as Trump policy worries dent US dollar

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SINGAPORE (Jan 31): Most Asian currencies rose on Tuesday against a wobbly US dollar as US President Donald Trump's tough stance on immigration stirred worries about his policy priorities and risks to the US economic outlook.

The Thai baht touched its highest level since Nov 10 at around 35.16 per US dollar, helped by local exporters' US dollar-selling at the month-end.

A few other currencies, including the Philippine peso and the Singapore dollar, gained 0.1% against the greenback.

Onshore trading in the Chinese yuan and the Taiwan dollar remained closed on Tuesday, for the Lunar New Year holidays.

The latest blow against the US dollar came after Trump on Friday ordered a temporary ban on the entry of refugees and people from seven Muslim-majority countries.

The immigration curbs stirred worries about Trump's inward-looking policies and possible risks to the economic outlook, and weighed on the greenback.

"When you take into account all the aspects of his actions, it's hard to buy the US dollar wholeheartedly," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

"There is just a lot of uncertainty, which makes it difficult to decide on a (trading) strategy," he added.

Trump fired top federal government lawyer Sally Yates on Monday after she took the extraordinarily rare step of defying the White House and refused to defend new travel restrictions targeting seven Muslim-majority nations.    

Against a basket of six major currencies, the US dollar last traded at 100.40, down from a one-week high of 101.02 that was set on Monday.

"The market is very much tethered to movement in the broader US dollar. We may be entering some very important times as the markets are digging for clues on the Trump policy front," Stephen Innes, senior trader at FX broker OANDA, said in a note.

In addition to Trump's policies and remarks, the near-term focus for investors is the US Federal Reserve's two-day policy meeting that starts later on Tuesday.

While the Fed is widely expected to keep the federal funds rate unchanged at a range of 0.50% to 0.75% this week, investors will be watching for any changes in the Fed's assessment of economic conditions.         

Most Asian currencies are on track for monthly gains in January, having enjoyed a lift as investors pared back their bullish bets on the US dollar amid worries that Trump was focusing more on trade protectionism than pro-growth policies.

CURRENCIES VS US DOLLAR
Change on the day at 0436 GMT

Currency                Latest bid   Previous day      % move
Japan yen                   113.55     113.80    +0.22
Sing dlr                    1.4192     1.4206    +0.10
Taiwan dlr*                 31.360     31.360    +0.00
Korean won                 1163.89    1159.20    -0.40
Baht                         35.19      35.27    +0.24
Peso                        49.760     49.820    +0.12
Rupiah                       13336      13340    +0.03
Rupee                        67.87      67.95    +0.12
Ringgit                     4.4270     4.4300    +0.07
Yuan**                       6.8807     6.8807    +0.00

Change so far in 2017

Currency                Latest bid   End prev year      % move
Japan yen                   113.55     117.07    +3.10
Sing dlr                    1.4192     1.4490    +2.10
Taiwan dlr                  31.330     32.279    +3.03
Korean won                 1163.89    1207.70    +3.76
Baht                         35.19      35.80    +1.76
Peso                         49.76      49.72    -0.08
Rupiah                       13336      13470    +1.00
Rupee                        67.87      67.92    +0.07
Ringgit                     4.4270     4.4845    +1.30
Yuan                        6.8807     6.9467    +0.96

* Taiwan's financial markets are closed from Jan 27 to Feb 1.
** Chinese financial markets will be closed from Jan 27 to Feb 2 for the Lunar New Year holiday.